Philadelphia & R.R. Co. v. Interstate Commerce Commission

• Decision Date: 20 November 1909
• Citation: 174 F. 687
• Parties: PHILADELPHIA & R. RY. CO. et al. v. INTERSTATE COMMERCE COMMISSION.
• Court: U.S. District Court — Eastern District of Pennsylvania

174 F. 687

PHILADELPHIA & R. RY. CO. et al. v. INTERSTATE COMMERCE COMMISSION.

United States Circuit Court, E.D. Pennsylvania.

November 20, 1909

Charles Heebner and Hugh L. Bond, Jr. (George Stuart Patterson, of counsel, for Pennsylvania R. Co.), for complainants.

J Whitaker Thompson, U.S. Atty., and Luther M. Walter, Sp Asst. U.S. Atty., for Interstate Commerce Commission.

Before GRAY, BUFFINGTON, and LANNING, Circuit Judges.

BUFFINGTON Circuit Judge.

This is a bill brought by the Baltimore & Ohio Railroad Company and a number of other railroad companies against the Interstate Commerce Commission, to enjoin the latter from enforcing its order of June 7, 1909, whereby it established a tariff rate on Big Vein coal carried from the George's Creek and Elk River regions in Maryland to coast points in other states. To this bill the Commission demurred. The questions pertinent to our disposition of the case may be considered under the first and fifth grounds of demurrer, which are:

'(1) That it appears from the face of said bill: That all of the proceedings required by statute to be taken were duly taken and had; that after a formal complaint and answer a full hearing was had; that the Commission arrived at its conclusion after being fully advised; that the order complained of was duly given, made, rendered, and served; and that the conclusion of said Commission was not arbitrary or reached through fraud; and therefore the act of the defendant is final and conclusive and not reviewable by the courts.'

'(5) That it appears from the face of the bill of complaint that the order of the Commission is lawfully issuable under the act to regulate commerce.'

By section 15 of the interstate commerce law (Act Feb. 4, 1887, c. 104, 24 Stat. 384 (U.S. Comp. St. 1901, p. 3165)), as amended by Act June 29, 1906, c. 3591, Sec. 4, 34 Stat. 589 (U.S. Comp. St. Supp. 1909, p. 1158), Congress empowered the Commission, if it 'shall be of the opinion that any of the rates or charges whatsoever, demanded, charged, or collected by any common carrier or carriers, subject to the provisions of this act, * * * are unjust or unreasonable, or unjustly discriminatory, or unduly preferential or prejudicial, * * * to determine and prescribe what will be the just and reasonable rate or rates, charge or charges, to be thereafter observed in such case as the maximum to be charged.'

The jurisdiction of the court in this case is invoked under section 15, which provides that the Commission's order may 'be suspended or set aside by a court of competent jurisdiction,' and section 16, which designates the particular court to exercise jurisdiction and provides that 'jurisdiction to hear and determine such suits is hereby vested. ' Now the power conferred being to suspend or set aside the Commission's order, the question arises in what way and to what extent will this court exercise its powers in order 'to hear and determine such suits'? Without referring to that general jurisdiction which federal courts, within constitutional limits, necessarily have to prevent infractions of the law, we note that the jurisdiction here invoked is conferred by the statute above quoted, and its purpose is to submit the action of an executive branch of the government to the judgment of the court that it may hear and determine such suit with a view to suspending or setting aside that action. On the argument counsel did not question the right of the Commission under the act to fix maximum rates, provided they were not confiscatory.

Now manifestly courts have no power to fix rates. Maximum Rate Cases, 167 U.S. 499, 17 Sup.Ct. 896, 42 L.Ed. 243; Gordon v. United States, 117 U.S. 697, 20 Sup.Ct. 1020, 44 L.Ed. 1219; Reagan v. Farmers' Loan & Trust Co., 154 U.S. 397, 14 Sup.Ct. 1047, 38 L.Ed. 1014. No such authority is conferred on federal courts by the Constitution, and by its grant to Congress of the power 'to regulate commerce * * * among the several states,' and 'to make all laws which shall be necessary and proper for carrying into execution the foregoing powers,' the exercise of power to regulate commerce is restricted to that agency. The fixing of rates as an incident to the regulation of commerce, being a nonjudicial function, it follows that when the legislative branch has itself acted therein, or by proper delegation of its powers has acted through the executive branch, such action, provided no legal, constitutional, or natural right has been violated, is not to be suspended or vacated by a court.

In pursuance of the powers above referred to, the Commission has made such an order in the premises, and that order is now in force unless it 'be suspended or set aside by a court of competent jurisdiction. ' Now on what principles should this court proceed in suspending or setting aside an act of an independent branch of the government? Manifestly, the act is one of those administrative acts of the executive branch of the government, duly empowered thereto by the legislative branch, that falls within that category of which Mr. Justice Harlan spoke in the Union Bridge Case, 204 U.S. 386, 27 Sup.Ct. 374 (51 L.Ed. 523):

'If the principle for which the defendant contends received our approval, the conclusion could not be avoided that executive officers, in all departments, in carrying out the will of Congress, as expressed in statutes enacted by it, have, from the foundation of the national government, exercised and are now exercising powers, as to mere details, that are strictly legislative or judicial in their nature. This will be apparent from an examination of the various statutes that confer authority upon executive departments in respect of the enforcement of the laws of the United States. Indeed, it is not too much to say that a denial to Congress of the right, under the Constitution, to delegate the power to determine some fact or the state of things upon which the enforcement of its enactment depends would be 'to stop the wheels of government' and bring about confusion, if not paralysis, in the conduct of the public business.'

It is therefore apparent that, when the question of suspending or setting aside an executive act comes before a court under such statute, the question is one of law, namely, whether the executive transcended its power or exercised such power without due regard to law. If, for example, there was a failure to comply with statutory requisites of notice, or to afford a statutory hearing, or the action taken was confiscatory-- these are all elements a court might consider and in exercising such jurisdiction inquire into the facts to ascertain the real subject involved as throwing light upon the lawful or unlawful character of the order under review. The principles affecting this exercise of jurisdiction are clearly set forth by Judge Lanning in Appleby v. Cluss (C.C.) 160 F. 984, where, on a bill to enjoin execution of a fraud order made by the Postmaster General, he said:

'A due regard for an order of an executive department of the government demands that the judicial department shall not require the head of that executive department, or any of his subordinate officials, to answer a bill in equity, the purpose of which is to secure a decree which in effect annuls the order, unless the bill makes a clear prima facie case that the facts adduced before the executive department could not possibly support the order, or that the complainant's legal or constitutional rights have been violated.'

This view is in accord with the principles set forth in San Diego v. National City, 174 U.S. 739, 19 Sup.Ct. 804, 43 L.Ed. 1154, and cases cited, viz.: Spring Valley v. San Francisco, 82 Cal. 286, 22 P. 910, 1046, 6 L.R.A. 756, 16 Am.St.Rep. 116; Chicago v. Wellman, 143 U.S. 339, 12 Sup.Ct. 400, 36 L.Ed. 176; Reagan v. Farmers' Loan, 154 U.S. 362, 14 Sup.Ct. 1047, 38 L.Ed. 1031; Smyth v. Ames, 169 U.S. 466, 18 Sup.Ct. 418, 42 L.Ed. 819;

Henderson v. Henderson, 173 U.S. 592, 19 Sup.Ct. 553, 43 L.Ed. 823; Missouri Co. v. Interstate Commerce Commission (C.C.) 164 F. 645; Knoxville Water Case, 212 U.S. 1, 29 Sup.Ct. 148, 53 L.Ed. 371; Consolidated Gas Case, 212 U.S. 19, 29 Sup.Ct. 192, 53 L.Ed. 382.

In the present case all the provisions of the statute were observed, and the parties concerned were duly notified and fully heard. It is, however, averred in the bill that the Commission 'based its finding that the rates on the Big Vein coal, when consigned over the lines of your orators to Baltimore, Wilmington, and Philadelphia for transshipment by vessel, were unreasonable and unjustly discriminatory, wholly upon the ground that by reason of the higher cost of production of the said Big Vein coal it could not, when so consigned, successfully compete with the coals of the Pocahontas and New River districts.'

Assuming for present purposes, that, if this conclusion were correct, the Commission could not legally base an order on that ground, analysis discloses not only that the pleadings have not brought before us all the facts and proofs on which the Commission acted, but that those which are before us show that the conclusion stated above is not warranted, and that the Commission based its action on other and different grounds. To that end we address ourselves to the facts. The rate here in question applies to the transportation of coal mined from the Big Vein in the George's Creek and Elk Garden region, which we will hereafter refer to as the 'George's Creek basin.' For the purpose of rating, these two fields and the Somerset (which the Commission refers to as the Pennsylvania) field to the north and west, and the Austen-Newburg (which the Commission refers to as the West Virginia) field, to the west, were included in one group and had been so grouped for...